Prepare a Consilidated worksheet for this problem.

Exercise 3 (LO 2) Equity method, first year, eliminations, statements. Panther Company acquires an 80% interest in Sargo Company for $272,000 in cash on January 1 2011, when Sargo Company has the following balance sheet: Assets Current assets ........... Depreciable fixed assets (net) .. $100,000 200,000 Liabilities and Equity Current liabilities . . . . . . . . . . . . . . . Common stock ($10 par..... Retained earnings .............. Total liabilities and equity ...... $ 50,000 100,000 150,000 $300,000 Total assets......... $300,000 The excess of the price paid over book value is attributable to the fixed assets, which have a fair value of $260,000, and to goodwill. The fixed assets have a 10-year remaining life. Panther Company uses the simple equity method to record its investment in Sargo Company The following trial balances of the two companies are prepared on December 31, 2011: Panther Sargo Current Assets ...... 38,000 130,000 Depreciable Fixed Assets ....................... 400,000 200,000 Accumulated Depreciation .............................. (106,000) (20,000) Investment in Sargo Company..................... 288,000 Current Liabilities 160,000) (40,000) Common Stock ($10 par) (300,000) (100,000) Retained Earnings, January 1, 2011. ........ (200,000) (150,000) Sales ... (150,000) (100,000) Expenses 110,000 75,000 Subsidiary Income........ (20,000) Dividends Declared......... 5,000 Totals ........ 0 0